Geithner Overly Optimistic About Fiscal Cliff
As soon as the results were in after last weeks U.S. presidential elections were tallied and the requisite partying/navel-gazing was complete, the country’s attention turned to the so-called ‘fiscal cliff’ which is slated to be an early measure of Obama’s second term.
If you can get past the cheesy literal cliff-side location this team chose to shoot on, the below video is a pretty good overview of what exactly the fiscal cliff is and what the implications of ‘going over’ said cliff would be.
Now the man heading up the responsibilities of fiscal-cliff avoidance/rectification is Treasury Secretary Timothy Geithner. Geithner status within the administration for Obama’s next term has been called into question (even by Geithner himself) with many believing that his exit will be announced at the culmination of these fiscal-cliff negotiations.
So what does Geithner think is the solution to the problem of the Fiscal cliff? He sat down with the Wall Street Journal’s David Wessel and discussed.
“I think there is every reason to believe this is a solvable problem. It’s true that we have a lot of challenges as a country, but I think there is a lot of support for trying to do things that will help make the economy stronger in the short term. There’s obviously universal support for extending the middle-class tax cuts, doing that would remove the greatest source of anxiety, (and) much of the greatest risk of the fiscal cliff. I think there is a lot of support for finding bi-partisan consensus on other things that would make the economy stronger like a set of commitments to finance a higher level of public investments in infrastructure and education…I think if you listen carefully there’s a lot of support for trying to make some real progress on our long-term fiscal challenges.”
Geithner is optimistic, and he has every reason to be. The one thing that he banks on rather heavily is something that the public has yet to see any evidence of (and we argued on our podcast, something that is anything but guaranteed): bi-partisan support. If Geithner is right and the two parties can put aside the increasingly binary nature of their relationship to work for the greater good of the United States economy, I would be quick to share Geithner’s optimism, however this kind of co-operation has been something that the American populace hasn’t experienced in the last 4 years (and truthfully, longer than that). So until the public sees evidence that this new political landscape will produce a renewed focus on both parties working together for the greater good of the United States and not simply more lines being drawn in the sand, I am wary of being overly optimistic.
Do you think we’ll avoid the fiscal cliff, or just kick the can further down the line?
By Steve Stransman exclusive to ResourceSpots.com